The Securities Appellate Tribunal (SAT) on Friday refused to give an interim order against the Securities and Exchange Board of India (Sebi) order prohibiting Subhas Chandra and his son Punit Goenka from holding any key positions until further orders. While Chandra is the Essel group chairman, Goenka is the managing director & CEO, of Zee Entertainment Enterprises Ltd.

The tribunal directed the market regulator to file a reply within 48 hours and posted the matter for final disposal on June 19.

In an interim order on Monday, Sebi had said that both Goenka and Chandra cannot hold key posts in any listed companies or their subsidiaries until further orders for allegedly siphoning off funds for their benefit.

Subsequently, both the aggrieved parties filed an appeal with the SAT seeking a stay on the Sebi order. They maintained that the regulator did not issue any show cause notice and did not follow the principles of natural justice.

“We think that passing an interim order at this stage will be virtually allowing the appeal,” the SAT bench said.

Appearing on behalf of Goenka, senior counsel Janak Dwarkadas said Sebi did not issue any show-cause notice and it violated the right to reputation of Goenka.

He claimed the market regulator did not investigate the matter and the whole exercise was a sham. He said the order could derail the merger between Zee and Sony even as the National Company Law Tribunal (NCLT) is set to hear the merger proposal on June 16.